Warren Buffet bets index fund can outperform hedge funds
In 2008, Warren Buffett bet that an S&P 500 index fund will outperform a group of hedge funds over 10 years, to demonstrate his point that retail investors should use low cost index funds rather...
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Consider a LIC before you bite into equities
All unlisted managed funds are sold at their net asset value (NAV). Imagine if one day, Asgard, BT and Colonial First State all sent a note to their advisers saying that as a special One Day Sale,...
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Overview of global fund investment trends
Morningstar Global Director of Fund Research Scott Burns recently gave a presentation at the Australian Morningstar Investment Conference discussing worldwide managed fund investment trends. The...
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Index versus active? Nobel Prize professors can’t agree
The ‘index versus active’ investing debate is one of the oldest arguments in the industry. On one side, researchers point to the legends of the market (think Buffett, Templeton, Lynch, Gross) who have...
View ArticleIndex versus active – our readers reprise
Last week’s article on index versus active portfolio management drew many comments, including on the website, by email and by forwarding other articles to us. Here’s a sample: Robert Keavney, Former...
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Which countries should be classified as emerging market?
Many retail investors are drawn to invest in emerging market funds, but think little about which countries they are investing in? Emerging market indices are poor representations of the investment...
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The case for active management in A-REITs
Amid the growing popularity of ASX-listed real estate investment trusts (A-REITs) as a way for investors to obtain exposure to real estate, there is a debate over whether investors should use an...
View ArticleThe potential of smart beta
By the early 1970s, finance literature had already documented that the average mutual fund consistently underperformed the market index, net of fees. The literature also demonstrated that a diversified...
View ArticleIndex funds invest in the bad and the good
Here’s a pithy marketing one-liner for you: ‘Most active fund managers underperform the index’. Combine the argument with the removal or mitigation of structural biases towards fee-paying products, and...
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The numbers tell the story for index investing
With the strong growth in index funds and exchange traded funds (ETFs) in the Australian marketplace in recent years, debate is again swirling on the benefits of active versus passive investment...
View ArticleWhy good active managers should outperform
The advent of cheaper and more novel financial products in the last decade has placed downward fee pressure on fund managers and focused attention on the merits of active versus passive fund...
View ArticleThe biggest rort of all
As a beginner investor there are a myriad of asset classes you can invest in and it must be a bit confusing knowing where to start. So let me give you an idiot’s guide to rating investments from...
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Global index flaw has flow-on consequences
It’s not universally known (but nor is it a secret) that MSCI, the major provider of performance indices on global equity markets, understates the performance of its global indices calculated for...
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Smart beta: watch the details
New index-based strategies known as ‘smart beta’ appear to be growing in popularity, but not all these strategies are created equal and investors should be mindful of implementation. These indices seek...
View ArticleIndex funds lack checks on stocks they buy
Two years ago in Cuffelinks, I wrote an article entitled Index funds invest in the bad and the good, and said; “The blind buying of mountains of stocks simply because they are in an index will drive...
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The index investing story could be even better
The 2017 financial year was a good one to be a passive (index-tracking) investor in large cap Australian equities. The S&P/ASX200 returned 14.1%. Add to this the other attractions of passive...
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